Telephone Communication Structure in Japan

Telecommunications markets in Japan was liberalized in 1985. Nippon Tele-graph & Telephone Public Corporation (NTT) was privatized and three competitors entered into long-distance call markets. It is since 1990 that traffic data between message areas (MA, = local areas) are available from these companies. Using the data, this paper examines communication structure in Japan. Our analysis proceeds as follows. At first, applying the Q-analysis and the Cluster analy-sis to each of nine regions of Japan, four patterns of communication are identified. Secondly, a traditional gravity model approach is applied to inter-MA traffic data from a representative region of each of the four patterns. Although it is recognized that the scale of subscriber set gives positive external effects and the distance between caller and callee impedes communication, these effects differ with regions, which represent some regional characters. Finally, a communication demand function is estimated in which demand externalities are defined as a distinct feature.